Conclusion
From a theoretical point of view, the German income approach contains some interesting specifics: Even though in the determination of gross rental income it is quite similar to the US income approach, in its apportionment of income between land and improvements, which allows for the building's limited useful life-span to be taken into account, it also contains elements of the discounted cash flow approach.
German PAP generally advises to rely on existing numbers, but allows to fall back on empirical values and experience when needed. Being highly standardised, the Ertragswertverfahren - when applied professionally - offers the reader of the report the opportunity to quickly examine and assess its underlying assumptions.
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